MEDICAID LEXICON[Return to Top]
NOTE: The following is a primer-like list of terms descriptive of the structure and operation of the Medicaid program. It is not intended to be an exhaustive list, but simply to be helpful to NAMI members trying to understand changes that may be proposed for the Medicaid program in their states.
Medicaid - is the state-federal public program of medical insurance for certain low income persons. It is embodied in Title XIX of the Social Security Act, also commonly called "medical assistance." Medicaid is primarily a state program.
Eligibility - is the status of qualifying or not qualifying for a program. Medicaid has its own set of rules that determine, state-by-state, whether an individual qualifies for enrollment and coverage.
Means Test - is the comparison of the program's maximum allowable financial thresholds for income and assets to the individual applicant's financial status. Some public programs--like Medicare--do not require the application of a means test.
Recipient - is the term used to identify a person currently eligible to participate in Medicaid. It is commonly used in social welfare programs that have a means test.
Beneficiary - is the term used to identify a person currently eligible to participate in the social insurance programs that do not use means tests (like Medicare, Part A and SSDI).
Categorical - is a term used to describe eligibility in the Medicaid context. It refers to persons who are certified eligible by class, or "category," rather than individually. It occurs when individually passing the entry requirements and being enrolled in one program automatically qualifies the recipient for another program.
SSDI beneficiaries are categorically eligible for Medicare after 24 months; SSI recipients are categorically eligible for Medicaid in most states; Medicare beneficiaries with income below the poverty line and assets at twice the SSI threshold are categorically eligible for Medicaid.
Mandatory - is the term that applies to both populations and services that federal law says must be included in a state's Medicaid program as conditions of participation. Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) recipients have to be enrolled for Medicaid because they are categorically eligible.
Health Care Financing Administration - is a principal operating agency--like the Public Health Service, the Social Security Administration (until March 1995), the Administration on Aging, and the Administration for Children and Families--of the federal Department of Health and Human Services (HHS). HCFA has responsibility for Medicare and Medicaid.
Federal Financial Participation - is the payment the federal government will make to a state as its share of the cost--at least half--for services to recipients. These payments are referred to as ffp.
Federal Medical Assistance Percentage - is the precise percentage of costs for services that the federal government will pay. The fmap formula involves a ratio of per capita state income to national per capita income. It is recalibrated annually using a rolling three-year average. A few hundredths of an fmap percentage loss can mean tens of millions of dollars to large states.
State Matching Requirement - is the percentage of the cost of services that the state must pay. It is the inverse of the fmap. If, for example, the federal government, by current-year formula, is paying 58.18 percent of costs (Kansas, 1993) the state is obligated to pay 41.82%
State Plan - is the quasi-contractual document required for participation. It is the basis of the agreement between the levels of government. HCFA receives and reviews the state plan.
State Plan Amendment - is a modification to a state plan to add or delete provisions that are within the state's allowable flexibility. The state plan may be amended annually. "Optional services," for instance, can be added at a state's initiative, or "amount, duration, and scope" of mandatory services could be expanded or contracted--and HCFA must approve.
Covered Services - are the medical and other services to beneficiaries for which Medicaid will pay. These are classified as mandatory or optional. In either class, each service must be named in law or regulation to qualify for ffp. Mandatory services include broad, generic descriptors like "inpatient and outpatient hospital services, nursing facility services for adults, physicians' services, laboratory and X-ray services." (See below for optional services.)
Optional Services - are those services named in federal law or regulation which a state may include in its Medicaid program and the federal government will share costs. Optional services include "IMD's (fewer than 16 beds only), targeted case management, psychosocial rehabilitation, clinic services, prescription drugs."
Provider - means any person, organization, or institution that may render services and be reimbursed (or pre-paid) by Medicaid. He, she, or it must be an allowable deliverer of services under state law and/or certification and licensing regulations. Examples include hospitals, nursing facilities, HMOs, physicians, laboratories, nurse practitioners, and physicians assistants.
Institution for Mental Disease - is a facility with more than 16 beds in which the patient census reveals a primary diagnosis at admission of mental illness in more than 50 percent of the residents. Abbreviated IMD, such facilities are precluded from Medicaid participation (the enforcement provision is the withholding of ffp), except for recipients over 65 years of age.
Drug Formulary - is a list of prescription medications for which a state Medicaid program agrees to reimburse. Drugs not on the list are not eligible for Medicaid reimbursement. Getting new drugs on a formulary may be difficult.
Waiver - is a provision in federal law that allows the responsible executive branch department of HHS or HCFA to permit--under safeguards around beneficiaries--a program design that does not comply with all normal requirements of federal law.
Section 1115 Waiver - is a provision permitting operation outside of normal compliance that is named for the section of the law that authorizes demonstration exceptions. Section 1115 has usually required rigorous research and evaluation designs, time limits, and no greater cost in ffp than otherwise would have been incurred.
Home & Community-based Waiver - is a provision [section 1915 (c)] permitting operation outside of normal compliance. It was created as an alternative to institutional care. Persons who would otherwise need institutional care may choose between that and community-based care.
Certain non-medical services otherwise not eligible for Medicaid reimbursement are allowed under 1915 (c). Th number of persons who may be served by such a waiver ("slots") for beneficiaries is limited by relationship to nursing facility beds that are or were really available as the alternative.
Freedom-of-choice Waiver - is an allowed departure [section 1915 (b)] from usual program operation that restricts choice of provider. Normal operation allows recipients full choice of participating providers. However, the stable funding requirement for a capitated system like an HMO precludes the option of choosing another system within the contract year.
Capitated Contract - is a legal arrangement whereby, instead of permitting fee-for-service arrangements, a state institutes the prepayment of a monthly fee to a provider network. Such networks must include hospital, pharmacy, laboratory, and treatment professionals. The network is then at risk for additional costs if necessary to deliver appropriate services to all enrollees.
Carve-out - is a program delivery and financing design wherein a state arranges services for a certain population (like persons with severe and persistent mental illness) through a distinct and separate component(s). This is typically worked out through separate contracting (or subcontracting) for services to the special population.
by Robert Bohlman
director, NAMI Government Relations
Rodent pelts stored in museums since the late 1800s provide the first evidence that Lyme disease (borrelia burgdorferi) caused by tick bites has been around in the U.S. for at least 100 years. This disease, which is rapidly increasing in certain areas, has been shown to have neuropsychiatric manifestations in a paper by Brain A. Fallon, M.D., et al, titled "The Neuropsychiatric Manifestations of Lyme Borreliosis." The study can be obtained from Morris Area Lyme Support, P.O.Box 1483, Morristown, NJ 07960. 201/267-4251.